IT Spending Coordination Cost and Firm Performance: The Mediating Effects of Transaction Cost

Abstract

Prior research concerning the role of information technology (IT) established a link between firm-level IT spending and physical output performance Many studies are related in manufacturing sectors or in a specific field Their findings prove IT spending is related to firm performance This study not only examines the relationship between IT spending and general sales and administration it also investigates the mediation relationship between IT intensity and coordination cost and firm performance The relationship is examined by drawing data from Ci intelligence on a panel of large United States (U S ) ?rms to those matching from Compustat We found a relationship between IT’s role in mediating coordination costs and return on assets (ROA) is robust However sales and general administration appears to play a more crucial role in the creation of profitability Hence this study also answers the call for research studies that investigate how business processes are impacted by capital expenditure The percentage of IT spending in overall business sales and a firm’s cost structure proves the impact on a firm’s financial performance

Date of Award	2020
Original language	English
Supervisor	Jeng-Chung Chen (Supervisor)